I actually have 3 questions in one.
1. If I record directly to an off-camera system, such as DV Rack or a hard drive system, will I get a better picture than using a pro miniDV tape?
2. What if I record with a pro camcorder, captured & edited with Vegas then print-to-tape on a cheaper consumer level camera?
3. If footage is captured on a pro camera by firewire to an editor while playing the tape in a cheaper consumer level camera, does this affect the image?

The picture quality of digital video (DV) recorded on a Mini DV cassette is basically identical or better to the quality of DV recorded on a Hi8 or 8mm cassette by a Digital8 camcorder. Mini DV can have up to 530 lines of video resolution for some camcorder models.

Your recording time is limited: Mini DV tapes are available in lengths of 30 and 60 minutes (plus, recording in LP mode lets you extend total recording time with a 60-minute tape to 90 minutes).

The advantage of mini DV tape

is that you can have plenty of these with you if you are going to be a long time away from your computer in remote places. Recording direct to a hard drive is also limited. Some hold 30-40 GB of video- what are you going to do when they fill up?

My issue with these units is with the use of MPEG2, which was meant as a distribution medium rather than a capture/edit medium. The interframe compression of MPEG makes frame-accurate editing difficult (to answer Mtn Biker's question above). If these units recorded DV files, a 20GB drive would be able to record over 1.5 hours (better than DV tape) before downloading to a computer; the 30GB drive would recrd over 2.5 hours.

To answer questions 2 and three

DV video is basically data on tape. The camera compresses it into a DV datasream and writes it to tape. If you use FireWire to transfer that data from the tape to a computer, the only processing going on is error correction. It shouldn't matter what camera you use to suck the video into a computer. DVCAM tapes have more physical area to write data, so there are advantages there. Also, using your camera as a tape deck can beat it up pretty fast ( head wear, other mechanical wear ).

In your case, how the footage is transfered to DV will play the largest role in the visual quality of the result. What lens was used? Was the camera a one-chip or three-chip camera? How big were the chips ( 1/2" or 1/3" ) ? How was keystoning handled? Was any white balancing done? The main differences between low-cost consumer DV camcorders and professional models aren't in the recording scheme, because the images are recorded in the same DV format. Pro gear has an optical system designed to suit the needs of professionals, while consumer gear has optical features tailored to the needs of hobbyists.